Government To Tax Foreign Incomes of Ghanaian Residents As Replacement For VAT On Electricity
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In response to the revenue gap caused by the abandonment of the value-added tax (VAT) on electricity, government plans to implement a tax on the foreign incomes of resident Ghanaians.
Earlier this year, the government introduced a VAT on electricity, but public backlash led to its abandonment, leaving a revenue gap of approximately GH¢1.8 billion.
Originally, the VAT on electricity was part of the revenue measures outlined in Ghana’s agreement with the International Monetary Fund (IMF).
However, its abandonment resulted in a shortfall in revenue.
To address this shortfall, the government aims to ensure compliance with a tax on the foreign incomes of Ghanaians who have resided in the country for 183 days or more.
“The alternative is a compliance measure on foreign incomes of resident Ghanaians. Not Ghanaians abroad. We want to make that clear. This is not a measure. It has been in the policy but its implementation has not been optimal,” the Ghana Revenue Authority (GRA) boss Julie Essiam said.
“We are happy to announce that we have put strong and structural measures in place to ensure that this yields the revenue of GH¢1.8 billion and beyond,” she added.
The GRA also announced a voluntary disclosure opportunity for taxpayers to declare their foreign income accounts within three months.
Taxpayers who comply will have the interest on their accounts waived.
The GRA boss said, “Its implementation has begun because the team is mobilising themselves and drafting the letters to be sent to individual account holders. So by the 2nd of May, those letters might have gone out.
“If individuals come forward within three months and say that, this is the amount in this account, the interest on the account will be waived and that is the voluntary disclosure aspect of this measure”.
Finance Minister Dr Mohammed Amin Adam acknowledged the need for new measures to revive the economy and urged Ghanaians to support the government during this process.
Source: JFM
